Budget talks continue on Capitol Hill, and President Obama now says he could accept a short-term hike in the debt ceiling if it will give members of Congress time to finalize a comprehensive, long-term deal. Still, the Administration doesn't want the short-term deal to last any longer than a few days. The problem for lawmakers is the multitude of choices they have to decide on. White House Spokesman Jay Carney says they have to be sure a fail-safe option is available, even as they pursue the possibility of doing something bigger.
The Gang of Six Senators released a plan earlier this week to reduce government borrowing and lower overall tax rates for everyone. The plan would reduce deficits by nearly $4 trillion during the next 10 years. However, there are some Congressional leaders who say the plan lacks details and could produce $2 trillion in tax increases instead of cutting taxes by $1.5 trillion like the Gang of Six says. House Budget Chairman Paul Ryan, R-Wisc., says the plan increases revenues while failing to seriously address exploding federal spending on health care, the primary driver of U.S. debt. However, Ryan says the plan has potential for worthwhile budget and tax reforms.
Senate Majority Leader Harry Reid, D-Nev., says he will file a procedural motion to begin work on the House-passed Cut, Cap and Balance legislation. The Senate is expected to reject that plan. In the meantime, Reid and Minority Leader Mitch McConnell, R-Ky., are still moving forward with their own plan to raise the $14.3 trillion debt ceiling. They plan on delivering their compromise package to the House late next week. So far the House hasn't shown much interest in the plan, and one House GOP aide has predicted that if no far-reaching $4 trillion deal comes to fruition, the House might settle on a debt limit increase, but of no more than $1 trillion.